Who’s got those all-important golden cannabis licences and who hasn’t
Fewer than half of the ASX’s pot stocks appear to be licensed to operate in Australia — and there’s an eight-month backlog on processing of new applications.
By our count 12 of the 27 ASX-listed companies involved in the medical cannabis sector have some form of licence to operate in Australia.
Medical cannabis licences in Australia have an expiry date of 12 months but so far it appears that none has been forcibly removed from listed companies.
Here’s a quick wrap of recent events:
Queensland Bauxite (ASX:QBL) has given up its application for an export licence, citing its proposed acquisition of MedCann as the reason because it has cultivation, import and export licences.
MMJ’s (ASX:MMJ) import licence was held through Satipharm, which is owned by Canadian company Harvest One which itself is 30.2 per cent owned by MMJ. Now that MMJ no longer controls Harvest One, following a capital raising that diluted their shareholding and the removal of their director from the board, Stockhead no longer considers that they have control over the licence and have removed it from our list.
The Hydroponics Company (ASX:THC) is importing stock, but couldn’t tell Stockhead whether they held the licence or were covered by another company.
Medlab Clinical (ASX:MDC) boss Sean Hall says he is in the very early stages of thinking about an export licence.
Medlab is gathering information needed for an application and is in the very early stages of feeling out who might be keen to buy their drug Nanabis overseas.
Affinity Energy (ASX:AEB) — more recently known as Algae.Tec — hopes to see cultivation and manufacturing licences before the end of the year, says managing director and chairman Mal James.
“The reality of the situation is we applied in December last year and the Office of Drug Control anticipated that they’d be able to process applications in a relatively short period of time.
“But my understanding is they’ve been inundated with applications,” he told Stockhead.
TPI Enterprises (ASX:TPE) chief Jarrod Ritchie says they have permission to grow, research and manufacture, but are waiting for the market to show some signs that it’s getting serious before committing to adding cannabis to the opioid portfolio.
Here’s a table showing who’s got which licences:
Scroll or swipe to reveal table. Click headings to sort
What the licences mean
The federal government’s Office of Drug Control (ODC) has issued 18 licences that allow companies to grow cannabis for commercial purposes, 10 licences that allow companies to grow cannabis for research, and 13 manufacturing licences.
The government will not reveal which companies hold the one-year licences — or even which States they are based in.
We only know about listed licence holders because of ASX disclosure requirements.
We also know the number of companies actually growing cannabis locally is small.
That’s because federal (and State) licences are only the first step. Growers also need a permit which involves a facility inspection and specifies things like which strains a licence holder can grow and the number and weight of its plants.
Only two listed companies have access to these crucial cultivation permits: one is held by Australia’s most valuable pot stock, the $315 million Cann Group (ASX:CAN), and the other by AusCann (ASX:AC8) partner Tasmanian Alkaloids.
The ODC website lists 15 authorised suppliers of medical cannabis, which include Bod Australia (ASX:BDA), Cann, and Medlab Clinical (ASX:MDC).
Creso Pharma (ASX:CPH), MGC Pharma (ASX:MXC) and Queensland Bauxite all piggyback off other companies’ import and supply licences.
Hold up at the ODC
Since April only two new cultivation licences have been granted and four manufacturing licences.
The reason is the Office of Drug Control.
Bod Australia chief operating officer Craig Weller says there is an eight-month back-log as the ODC works through as many as 180 applications.
He told Stockhead the ODC had staffed the new medical cannabis section with the expectation of receiving perhaps 18 applications.
Mr Weller, and other sources spoken to by Stockhead, say the office is in the process of applying for extra funding from Treasury to lift its staffing levels.
But although the industry is trying to charge ahead, if it’s customers they’re after they can afford to wait: the Therapeutic Goods Administration has only approved 705 people to use medical cannabis under the Special Access system this year.